Speaker 1: Welcome to tech Stuff, a production from I Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio
Speaker 1: and how the Tech Area. It's time for a classic episode.
Speaker 1: Last week we had the Comcast Story Part one as
Speaker 1: our classic episode. So guess what this week it's the
Speaker 1: Comcast Story Part two. Who to thunk it? This episode
Speaker 1: originally published on November eleven, two thousand fifteen. As I
Speaker 1: said last week, I'm pretty sure we're due for a
Speaker 1: part three. I'm gonna have to get to work on
Speaker 1: that and um and pair it with these previous episodes
Speaker 1: so that we can, you know, have a fuller picture.
Speaker 1: In fact, by the time you hear this this uh,
Speaker 1: this classic episode, maybe I will have already done that
Speaker 1: because I record the classics in batches, and I think
Speaker 1: I'm about four months ahead now, so maybe by the
Speaker 1: time this classic publishes, I will have already done part three.
Speaker 1: It's like time travel, but more boring. Anyway, let's sit
Speaker 1: back and listen to the Comcast Story Part two. We
Speaker 1: talked about the founding and the rise of of Brian Roberts,
Speaker 1: the son of founder Ralph J. Roberts. I thought i'd
Speaker 1: pick up specifically right there. This is going back to
Speaker 1: n that's when Ralph J. Roberts named his son, Brian Roberts,
Speaker 1: the president of Comcast. Not the time, Brian was just
Speaker 1: thirty years old, and the announcement caused a bit of
Speaker 1: a stir because here's this young guy taking over the
Speaker 1: role of president of a major cable company that had
Speaker 1: been making some pretty pretty hefty moves in the industry. Now,
Speaker 1: Ralph J. Roberts said he would stay on as the
Speaker 1: chairman of the company. And while thirty is pretty darn
Speaker 1: young to be the president of a rapidly growing company,
Speaker 1: Brian had actually been working for Comcast in one way
Speaker 1: or another since before he was ten years old. According
Speaker 1: to some reports, he was seven when he started working,
Speaker 1: which meant they had twenty three years of experience working
Speaker 1: for Comcast. I do question exactly what he was doing
Speaker 1: at seven years old, but that's the story, at least
Speaker 1: in certain Comcast literature. But that would mean that he
Speaker 1: was actually one of the more senior employees of Comcast.
Speaker 1: He had worked there longer than a lot of other
Speaker 1: people there, so at least from a seniority standpoint, it
Speaker 1: wasn't that unusual, although some might argue that it was
Speaker 1: a little weird for a father to name his son
Speaker 1: the president of the company he founded. At any rate,
Speaker 1: Brian Roberts definitely dedicated himself to the success of the company,
Speaker 1: there was no question about that. Around that time, operations
Speaker 1: were continuing to grow in Britain. If you listen to
Speaker 1: the last episode, you know that one of the things
Speaker 1: Comcast looked at in the eighties was to expand in
Speaker 1: in the UK because it was starting to get really
Speaker 1: difficult to grow in the United States. They were starting
Speaker 1: to reach full penetration of cable service and the few
Speaker 1: cable companies that were left were really expensive and limited
Speaker 1: in their range, so they looked elsewhere. Well By, they
Speaker 1: had one million customers in the United Kingdom, and Comcast
Speaker 1: made additional purchases in the cell phone space as well
Speaker 1: here in the United States in order to grow its business,
Speaker 1: as m Cell was not growing as quickly as the
Speaker 1: company had hoped. If you remember, m Cell was the
Speaker 1: cable the cell phone service company they purchased in an
Speaker 1: effort to get into a new field. But am Cell
Speaker 1: kind of suffering the same issues that the cable service
Speaker 1: industry was suffering and that people weren't necessarily flocking to
Speaker 1: M cell to become customers. So instead of trying to
Speaker 1: push that business out harder, Comcast looked at acquiring additional
Speaker 1: cell phone service companies to bolster its customer base US
Speaker 1: that way, so if growth isn't there, you should just
Speaker 1: go out and buy it, I guess. In the headquarters
Speaker 1: for a Comcast, which were located at one Meridian Plaza
Speaker 1: in Philadelphia, caught fire. The building was totally destroyed. The
Speaker 1: fire took nineteen hours to extinguish, so Comcast as actually
Speaker 1: the corporate headquarters was shut down for about eight days
Speaker 1: until they set up a temporary headquarters four blocks away
Speaker 1: from their original burnt out home. Also in Comcast held
Speaker 1: a bit of a marketing stunt. They completed a five
Speaker 1: way international phone call to demonstrate you don't need a
Speaker 1: telephone company to make a call, even a complicated one,
Speaker 1: and that really prompted telephone companies to argue that they
Speaker 1: should be allowed to enter the cable television business, since
Speaker 1: the cable television business was now dominating in the phone business,
Speaker 1: at least in cell phone coverage. Also in Comcast, bought
Speaker 1: interest in Store Communications, the company that had previously sold
Speaker 1: as Florida Operations to several years earlier. You remember I
Speaker 1: mentioned that in the previous episode, and Comcast became the
Speaker 1: third largest cable operator in the United States after it
Speaker 1: acquired the US cable operations of McLean Hunter. The company
Speaker 1: also launched a new public company in the UK called
Speaker 1: Comcast UK Cable Partners and Comcast made golfers extremely happy
Speaker 1: when they partnered with a few other companies and became
Speaker 1: a founding investor of the Golf Channel, which, as I recall,
Speaker 1: was one of the earliest channels to offer high definition programming.
Speaker 1: That was a little bit later, but thank goodness you
Speaker 1: could watch golf and high definition. I find golf very
Speaker 1: relaxing to watch. I that's the best thing I can
Speaker 1: say about it. I guess I certainly takes skill to play,
Speaker 1: and I lack it at any rate. That year, Comcast
Speaker 1: also entered a partnership with Sprint UH Telecommunications Incorporated and
Speaker 1: Cox Communications, and together they formed the Sprint Telecommunications Venture,
Speaker 1: which was later called Sprint Spectrum LP and later still
Speaker 1: was called Sprint PCs. So once again, Comcast continues to
Speaker 1: try and diversify, expanding into cellular service and wireless service.
Speaker 1: Comcast itself would continue to grow mainly through acquisitions. As
Speaker 1: we've seen in our previous episode, the company would buy
Speaker 1: up other cable operators and mostly expand that way, eliminating
Speaker 1: competition along the way, which certainly helped and in Comcast
Speaker 1: had more than four point three million customers, mainly through
Speaker 1: this tactic of buying up existing companies and converting them
Speaker 1: into Comcast, so customers found themselves becoming Comcast customers just
Speaker 1: through these acquisitions. Comcast bought a sixty three percent share
Speaker 1: of the Philadelphia Flyers from a company called Spectacre, which
Speaker 1: was created by Flyers founder Ed Snyder. Comcast had created
Speaker 1: a new company with this partnership, and it's now called
Speaker 1: Comcast Spectacre. The company not only owns and manages the Flyers,
Speaker 1: but also the Wells Fargo Center in Philadelphia, and the
Speaker 1: company has divisions overseeing the venue, ticketing and concessions. This
Speaker 1: is not the only sporting franchise that Comcast owns. There
Speaker 1: are others in the Philadelphia area as well, which makes sense.
Speaker 1: I mean, that's again where Comcast headquarters are, That's where
Speaker 1: a couple of the co founders of Comcast grew up
Speaker 1: and uh they are still very much heavily involved in
Speaker 1: the sports area of Philadelphia. Comcast also announced it would
Speaker 1: create a new channel in Philadelphia just called Comcast sports Net,
Speaker 1: specifically a regional sports channel for the Philadelphia area. And finally,
Speaker 1: in nineteen Comcast got into the broadband business. The company
Speaker 1: launched a service called Comcast at Home, with the AT
Speaker 1: being the AT symbol, and they launched it in Baltimore, Maryland,
Speaker 1: and Sarasota, Florida, kind of as a sort of prototype.
Speaker 1: They're they're testing grounds. They wanted to see if this
Speaker 1: business would have any legs, and the trial run offered
Speaker 1: a cable modem service to customers and as it turned out,
Speaker 1: and ended up being a fruitful business, which Comcast quickly
Speaker 1: began to adopt and roll out in other areas. In
Speaker 1: nineteen seven, another major company took interest in Comcast, and
Speaker 1: that major company is Microsoft. So Bill Gates's company invested
Speaker 1: one billion dollars in Comcast in ninete. The purpose of
Speaker 1: that investment was to help Comcast deploy high speed data
Speaker 1: and video services through its infrastructure. So Comcast was starting
Speaker 1: to look at ways of creating a fiber optic coaxial
Speaker 1: sort of system, replacing lots of copper lines with fiber
Speaker 1: optic lines to deliver much faster service. And it was
Speaker 1: through this investment that Comcast was able to afford that
Speaker 1: infrastructure without affecting its operating funds too much. And in
Speaker 1: this way, this was a step to move towards the
Speaker 1: world we live in now, in which people in the
Speaker 1: United States can get high speed Internet streaming to different
Speaker 1: devices in the home and not just PCs. In fact,
Speaker 1: in the press release that Microsoft VP of Corporate Development,
Speaker 1: Greg Maffei had taken part in, MAFE had said, like Comcast,
Speaker 1: Microsoft has always believed that increasing network bandwidth is a
Speaker 1: key to the eventual convergence of the Internet, the PC,
Speaker 1: and the television. So even then there was a look
Speaker 1: at we're using these pipes in the parlance of the web.
Speaker 1: We're using these pipes to deliver TV and to deliver broadband. Broadband,
Speaker 1: by the way, is being delivered over Why of those
Speaker 1: six mega hurts channels that I talked about in the
Speaker 1: first episode that cable can you cable can hold hundreds
Speaker 1: of mega hurts, So broadband internet connection is just six
Speaker 1: mega hurts of a cable that's plenty of space available
Speaker 1: for that. We'll be back with more about Comcast and
Speaker 1: its history after this quick break. So Microsoft was saying,
Speaker 1: we've got this delivery system that's doing both television and Internet.
Speaker 1: It's only a matter of time before we start to
Speaker 1: see these different technologies start to converge into a single technology.
Speaker 1: And as it turns out, that's very much true. It
Speaker 1: took a little bit longer than what they were expecting,
Speaker 1: I imagine, but that's what we're seeing now. A lot
Speaker 1: of people either have smart televisions or they have their
Speaker 1: TVs hooked up to one or more set top devices
Speaker 1: that allows them to view Internet content on their televisions.
Speaker 1: And there are some who argue that eventually that will
Speaker 1: be the primary and perhaps only way that will get
Speaker 1: content on our TVs. That we won't receive programming from
Speaker 1: a cable service directly. It will be through an Internet service.
Speaker 1: And that's quite possible. Well more and more people are
Speaker 1: opting for that, as we'll say later in the episode.
Speaker 1: At any rate, by this time, cable television wasn't even
Speaker 1: the largest division within Comcast. Cable tv was taking a
Speaker 1: back seat. Uh, So Comcast had interest in content and
Speaker 1: cellular services, and there were growing concerns that the company
Speaker 1: in charge of delivering content was also in the business
Speaker 1: of creating content, and those concerns would grow over the
Speaker 1: following years. This is where you started seeing people make
Speaker 1: noise about net neutrality. How can a delivery system remain
Speaker 1: unbiased when it also was creating content being delivered on
Speaker 1: that system. In other words, if you are a company
Speaker 1: that creates content and you're also a company that allows
Speaker 1: content to be delivered to customers, how can anyone be
Speaker 1: certain that you don't give your own content preferential treatment.
Speaker 1: Maybe you slow down other types of content across your network,
Speaker 1: maybe you don't allow it to even broadcast on your network.
Speaker 1: Maybe you tell your customers, hey, the stuff we have
Speaker 1: is the best stuff out there. You don't need anything else.
Speaker 1: These were big concerns, and while Comcast was largely playing nice, uh,
Speaker 1: it was a it was a worry that perhaps in
Speaker 1: the future that would not be the case. And so
Speaker 1: we really started getting into the conversations about net neutrality
Speaker 1: around this time. I mean they had been around before that,
Speaker 1: but this is when it really started to take more
Speaker 1: of a spotlight, and that would increase over the years.
Speaker 1: Skipping ahead to two thousand one, Comcast bought the Outdoor
Speaker 1: Life Network and expanded its investment in the Golf Channel,
Speaker 1: which ended up giving Comcast controlling interest in that network.
Speaker 1: And it also announced it would purchase a T and
Speaker 1: T Broadband for a cool seventy two billion dollars. At
Speaker 1: that time, a T and T Broadband was the largest
Speaker 1: cable TV provider in the United States. So Comcast both
Speaker 1: eliminates some competition and grows its own cable television services
Speaker 1: by buying another service. Uh, which no big surprise again
Speaker 1: if you're looking back along the history of Comcast, that
Speaker 1: was the tactic from day one. Really. In two thousand two,
Speaker 1: Comcast unveiled plans for HD television and video on demand services. Again,
Speaker 1: the Golf Channel was one of those early HD channels.
Speaker 1: As I recall, this was, you know, one of those
Speaker 1: things where the United States was definitely trailing behind Japan
Speaker 1: by several years. But HD television's back in the early
Speaker 1: two thousand's were really expensive. I don't know if you
Speaker 1: guys remember, because these days, you know, you can go
Speaker 1: out and buy an HD television for a relatively low cost. Still,
Speaker 1: several hundred dollars. But you know, when you start looking
Speaker 1: at things like four K televisions, they are relatively inexpensive.
Speaker 1: HD ones, that is, HD are relatively inexpensive compared to
Speaker 1: four K, but just like four K. Now, back then,
Speaker 1: there were very few channels that actually offered up h
Speaker 1: D content. So you can get an HD television, but
Speaker 1: there wasn't much to watch on it at the time.
Speaker 1: The Golf Channel was one of those things, so if
Speaker 1: you really like golf, you can get a really good
Speaker 1: look at it. Uh. Also, Brian Roberts assumed the role
Speaker 1: of CEO of the company, becoming president and CEO in
Speaker 1: two thousand two. Not long after that, he would actually
Speaker 1: also assume the role of chairman, so became president, CEO
Speaker 1: and chairman of Comcast. Again, keep in mind this is
Speaker 1: the son of the founder, Ralph J. Roberts. In two
Speaker 1: thousand four, Comcast made an unsuccessful bid for a hostile
Speaker 1: takeover for the Walt Disney Company. Now that might sound
Speaker 1: pretty weird, because today Disney is bigger than ever. Disney
Speaker 1: owns so much. Disney bought Marvel, Disney bought the Star
Speaker 1: Wars franchise. The movies are doing really well, But in
Speaker 1: the early two thousand's, Disney was in turmoil. There were
Speaker 1: leadership issues. People were disenchanted with Michael Eisner as the
Speaker 1: chairman of Walt Disney. The company itself was not doing
Speaker 1: as well in the market as it had been previously.
Speaker 1: Some people were beginning to feel that Disney itself had
Speaker 1: the company had lost its way, and people like Roy Disney,
Speaker 1: who had been on the board of directors, seemed to
Speaker 1: be in dismay at the state of the company. So
Speaker 1: the bid was somewhere in the fifty four billion dollar range,
Speaker 1: and it was based on stock price. It was going
Speaker 1: to be a stock exchange deal if this were to
Speaker 1: actually go through. But it was a hostile takeover. And
Speaker 1: what does that mean. Well, originally Comcast was sending messages
Speaker 1: to Disney chairman Michael Eisner, but Eisener refused to discuss
Speaker 1: a deal. Then Comcast went over Eisner's head and sent
Speaker 1: a letter of intent directly to the board of directors saying,
Speaker 1: we want to purchase your company. Here the here's the
Speaker 1: deal where we want to do it in stock. The
Speaker 1: stock is currently valued at fifty four billion dollars. Now
Speaker 1: Disney itself was being valued somewhere in the sixty six
Speaker 1: billion dollar range. H but again, it was kind of
Speaker 1: struggling at the time. So comcast hope was that the
Speaker 1: Board of directors would come and talk to Comcast and
Speaker 1: they would be able to work this out, and that
Speaker 1: uh you know, maybe the word board of directors thought
Speaker 1: this would be the best approach in order to make
Speaker 1: money for shareholders for Disney shareholders, and the attempt was
Speaker 1: huge news because the number of properties that would have
Speaker 1: been involved were significant. Disney at that time was already
Speaker 1: the parent company of ESPN and ABC, so those would
Speaker 1: fall under the role of Comcast. Then Comcast the delivery
Speaker 1: system would also be in control of ABC and ESPN,
Speaker 1: and people were worried that this would mean Comcast would
Speaker 1: be able to leverage that over other providers. So let's
Speaker 1: say Time Warner Cable and it comes up and Comcast says, hey,
Speaker 1: I own ESPN, and if you want ESPN to run
Speaker 1: on your cable networks to your cable customers, you're gonna
Speaker 1: have to pay X amount to have access to that content. Uh,
Speaker 1: you know, it would have been a very powerful leveraging tool,
Speaker 1: but there was no need to worry about that. The
Speaker 1: deal actually fell through when shareholders for both Disney and
Speaker 1: Comcast were resisting the move for different reasons. Comcast stock
Speaker 1: price fell eleven percent over the time from when they
Speaker 1: announced the bid to the time when they decided to
Speaker 1: walk away. Now, because the stock price fell eleven percent,
Speaker 1: and because their bid was about an exchange of stock,
Speaker 1: the value of the stock they were bidding fell, I mean,
Speaker 1: it wasn't as valuable as it used to be. This
Speaker 1: would be as if I went up to you and said, hey,
Speaker 1: I want to buy your shoes for ten bucks, and
Speaker 1: you say, well, I'll think about it, and the next
Speaker 1: day I come up to you with a ten dollar bill.
Speaker 1: But in that time, the value of ten dollars has decreased,
Speaker 1: meaning the buying power of that ten dollars is less.
Speaker 1: It's similar, except now we're talking about actual stock, not
Speaker 1: the value of currency. But the point being that what
Speaker 1: used to be worth fifty four billion dollars was now
Speaker 1: worth less than that, So that made it a much
Speaker 1: less attractive deal for the Disney board of directors. Meanwhile,
Speaker 1: the board of the board of Directors are also getting
Speaker 1: the message from their shareholders, we don't want you to
Speaker 1: sell this company to Comcast, and since both parties were
Speaker 1: receiving this kind of resistance, Comcast announced it would drop
Speaker 1: the bid just a few months after it had first
Speaker 1: announced its intention and uh and Roberts had said he
Speaker 1: was very disappointed in the Disney board of directors for
Speaker 1: not coming in and communicating with him. He thought that
Speaker 1: it was the best deal for both companies. Meanwhile, the
Speaker 1: board of directors didn't uh didn't really dignify that particular
Speaker 1: statement with a response. Also into the and for Comcast
Speaker 1: purchased a little company called tech TV and who boy,
Speaker 1: is this a heck of a story. So Comcast carried
Speaker 1: a company a channel called G four, which catered to
Speaker 1: video game fans. It was mostly content related to video
Speaker 1: games in some way, including things like review shows, shows
Speaker 1: that just did clips of video games, uh, game shows
Speaker 1: that were video game related, lots of stuff like that.
Speaker 1: Tech TV, on the other hand, was a more general
Speaker 1: technology based channel where they had everything from product reviews
Speaker 1: to h question and answer like people could call in
Speaker 1: and ask experts how to do certain things with their computers,
Speaker 1: like how to install motherboards, that kind of stuff like
Speaker 1: actual technical help UM, as well as shows that were
Speaker 1: things like like they had their own video game review shows,
Speaker 1: so there were there were competing shows on the two channels.
Speaker 1: So Comcast purchases tech TV in two thousand four and
Speaker 1: then merges it with G four, creating the G four
Speaker 1: Tech TV channel, and then kind of letting the two
Speaker 1: slates of of programming battle it out to see which
Speaker 1: ones would remain and which ones they would get rid of.
Speaker 1: And I've got a lot of friends who worked either
Speaker 1: for G four or tech TV, and I hope to
Speaker 1: do an episode in the future. I've already recorded some
Speaker 1: interviews about this. Actually, I hope to do an episode
Speaker 1: in the future about tech TV and G four and
Speaker 1: the merging of the two, and to include interview segments
Speaker 1: that I have gathered over time. So that's something I
Speaker 1: want to do in the future, and it will definitely
Speaker 1: be a long episode, probably a multi partner because it
Speaker 1: was so complicated. It was a venture that people when
Speaker 1: when these channels first started, they were really excited about
Speaker 1: them because this was these were industry is that were
Speaker 1: all getting more and more important. Over time. People were
Speaker 1: getting more interested in technology and computers and video games.
Speaker 1: But when you get these big corporations like Comcast involved,
Speaker 1: sometimes the ideas that people had when they first founded
Speaker 1: the channel end up getting changed or lost or or discarded,
Speaker 1: and uh, it creates a very emotional kind of story.
Speaker 1: So keep in tune with tech stuff. Let me know
Speaker 1: if that sounds interesting to you, because I do hope
Speaker 1: to do it in the future. I still have to
Speaker 1: do several more interviews in order to get kind of
Speaker 1: a full story of it. We're about to wrap up
Speaker 1: the Comcast story as of two thousand and fifteen at
Speaker 1: any rate, but first we need to take another quick
Speaker 1: break moving on with Comcast. By the way, GIF tech
Speaker 1: TV doesn't exist anymore. In case you were wondering if
Speaker 1: if you weren't aware, G four tech TV eventually went
Speaker 1: away and I believe became the Spike Network. If I'm
Speaker 1: not mistaken, or it's no, it's Esquire, I'm sorry, it's
Speaker 1: the Esquare network. I believe um Esquire would eventually take
Speaker 1: over for G four tech TV, and so that channel
Speaker 1: no longer exists and a lot of good people worked
Speaker 1: for that channel over time. Anyway, two thousand five, Comcast
Speaker 1: joins a group of investors, which included Sony Corporation of America,
Speaker 1: to purchase a twenty steak in Metro Goldwyn Meyer better
Speaker 1: known as MGM Studios, so the entertainment studios that produced
Speaker 1: lots of movies, including the James Bond franchise. It turned
Speaker 1: out to be a pretty tough investment, so five years later,
Speaker 1: in two thousand ten, MGM would file for Chapter eleven
Speaker 1: bankruptcy and they would emerge from bankruptcy after a little
Speaker 1: more than a month after entering bankruptcy with the creditors
Speaker 1: MGMs creditors taking control of the company. So that was
Speaker 1: a pretty rough time. I mean, it was an investment,
Speaker 1: it was a gamble, and unfortunately for the investors, the
Speaker 1: market for DVDs was really falling out by that point
Speaker 1: and that ended up taking a big hit. MGM took
Speaker 1: a big hit from that. That same year two five
Speaker 1: that is, Comcast unveiled at digital phone service and plans
Speaker 1: to purchase internet businesses, further getting involved in both the
Speaker 1: delivery and production of cable content both on TV and
Speaker 1: on the Internet. So if you have ever looked at
Speaker 1: Comcast Exfinity, which is the brand for their digital service
Speaker 1: to homes, you often will see that it can be
Speaker 1: bundled where you get phone service, cable television, and Internet
Speaker 1: broadband all bundled together. That's, you know, a calculated approach
Speaker 1: that com guests made back in this time. In two
Speaker 1: thousand seven, that's when Comcast actually acquired Fandango, the movie
Speaker 1: ticket service, the one that kind of precipitated this whole
Speaker 1: discussion about Comcast in the first place, because if you
Speaker 1: recall from episode one of this series, I mentioned that
Speaker 1: I started looking into this after I had problems buying
Speaker 1: Star Wars tickets because the Fandango service had been overwhelmed
Speaker 1: by demand and it pretty much collapsed. By the way,
Speaker 1: in case you were worried, I did eventually get Star
Speaker 1: Wars tickets for opening night. I just had to wait
Speaker 1: till the next morning. It's just I am not a
Speaker 1: good Jedi. I don't have patience, So it was a tough,
Speaker 1: tough twenty four hours or so. At any rate, Comcast
Speaker 1: purchased Fandango back in two thousand and seven, and uh,
Speaker 1: Fandango is one of those services that I personally find
Speaker 1: a little rustrating. I much prefer when movie theaters have
Speaker 1: their own, uh theater specific services to to sell tickets
Speaker 1: to customers, because you don't have to worry if there's
Speaker 1: a huge amount of demand for the overall film, typically speaking,
Speaker 1: because it's distributed amongst all those theaters. It's when you
Speaker 1: have a centralized service where all that demand is going
Speaker 1: to a single collection of servers where you start running
Speaker 1: into these problems. And granted the Star Wars issue was
Speaker 1: a special case, it's not like that's going to happen
Speaker 1: with every movie. For example, Jim and the Holograms. Don't
Speaker 1: think that one's going to collapse the system, even though
Speaker 1: it's truly outrageous, truly, truly, truly outrageous. So two thousand seven,
Speaker 1: Fendango acquisition happens. UM I could go on about the
Speaker 1: cable service companies that Comcast acquired over the next few
Speaker 1: years is but by now you guys are all familiar
Speaker 1: with that story. It's the same story over and over.
Speaker 1: It's just the names and the prices change from case
Speaker 1: to case. In an effort to grow the company and
Speaker 1: increase the number of customers, Comcast kept acquiring other businesses,
Speaker 1: including ones like Patriot Media, Susquehanna Communications, and others. UH
Speaker 1: and Comcast and Time Warner together would split up the
Speaker 1: assets of another company called Adelphia Communications. Adelphia had gone
Speaker 1: bankrupt and so as part of the UH in order
Speaker 1: to settle the debt that Adelphia had acquired, they started
Speaker 1: selling off assets, and Comcast and Time Warner we're both
Speaker 1: allowed to buy up some of those, which not great
Speaker 1: news necessarily if you wanted more competition, uh, since these
Speaker 1: were the two big players in the United States at
Speaker 1: that same time. Comcast continued to launch channels like fear
Speaker 1: Net and Exercise TV, and so they were controlling the
Speaker 1: distribution and content in an effort to set itself apart
Speaker 1: from competing cable and satellite services. Also, the Walt Disney Company,
Speaker 1: while it was not open to a hostile takeover bid,
Speaker 1: it did sell off its thirty nine share in the
Speaker 1: E Networks to Comcast. So Comcast was able to pick
Speaker 1: up a significant share in those those uh, those companies,
Speaker 1: those those networks, they didn't have controlling interest, but is
Speaker 1: nothing to sneeze at now. That doesn't even cover the
Speaker 1: continued interest in wireless broadband. Comcast was one of the
Speaker 1: companies that invested in clear Wire Corporation, for example, so
Speaker 1: Comcast was still very much interested in expanding in that
Speaker 1: industry as well. And the next really big big piece
Speaker 1: of news dates to two thousand nine and that's when
Speaker 1: it was announced that g E had agreed to sell
Speaker 1: controlling stake in NBC Universal to Comcast. Now, the approval
Speaker 1: for this deal would take quite some time. Congress scrutinized
Speaker 1: this deal, and it wasn't until two thousand eleven that
Speaker 1: Congress approved the deal, and the acquisition itself wouldn't be
Speaker 1: complete until two thousand thirteen. So from two thousand nine
Speaker 1: to two thousand thirteen this deal was taking place. That's
Speaker 1: how big a deal we're talking about here. And the
Speaker 1: approval from Congress was actually conditional. It wasn't yeah, go
Speaker 1: ahead and you can buy them. And they actually had
Speaker 1: some some specific conditions that the companies had to adhere to.
Speaker 1: Comcast had to make assurances that it wouldn't prevent NBC
Speaker 1: programming from airing on competing broadcast services. They couldn't just say, well,
Speaker 1: now anything that's on NBC can only air on Comcast,
Speaker 1: or it can air on other stations, but only if
Speaker 1: you pay an outrageous premium for the broadcast. That was
Speaker 1: part of the agreement that Comcast would not make those
Speaker 1: kind of moves um. It also sparked another round of
Speaker 1: discussions about net neutrality, making certain delivery services aren't so
Speaker 1: wrapped up in programming that they begin to tinker with accessibility.
Speaker 1: And uh, this is still a big deal today. I mean,
Speaker 1: this is a giant thing about about these distribution companies
Speaker 1: getting involved in content on this level, and as they
Speaker 1: own more and more of it, there's a greater concern
Speaker 1: that they will cause real issues for customers, that it
Speaker 1: hurts the customer In the long run. It's a great
Speaker 1: business decision, you know, from the business side, you can't
Speaker 1: argue it because it's gonna make tons of money for shareholders.
Speaker 1: But as a customer, as the person who comes home
Speaker 1: and wants to watch television, it's a negative experience, or
Speaker 1: it can be. It can certainly lead to one. So
Speaker 1: that's why these conditions were built in to the agreement.
Speaker 1: And then in two thousand and fourteen, skipping ahead to that,
Speaker 1: Comcast made a move to acquire its competitor, Time Warner
Speaker 1: Cable and this is when the Internet totally lost its mind.
Speaker 1: For very good reason. This action, more than any other,
Speaker 1: brought that net neutrality argument into the spotlight. Comcast was
Speaker 1: essentially saying that they wanted to buy its chief competitor,
Speaker 1: which would drastically reduce options for customers in numerous markets,
Speaker 1: which Comcast actually argued was a benefit to the customer
Speaker 1: if you can believe it. Now, keep in mind again,
Speaker 1: and most markets, customers don't have that much choice. They
Speaker 1: might have a choice of one cable provider and maybe
Speaker 1: one or two satellite providers, which is getting fewer and
Speaker 1: fewer anyway because of other acquisitions and consolidations. But that's it.
Speaker 1: They don't necessarily you know, it's it's it's rare. When
Speaker 1: you're in an area where you're like, well, I can
Speaker 1: get either Time Warner or I can get Comcast. It
Speaker 1: may be that you have either Comcast or a mobile
Speaker 1: wireless provider or satellite, and that's it. You don't have
Speaker 1: option between cable companies in other words, and that is problematic.
Speaker 1: And Comcast was arguing that by buying Time Warner it
Speaker 1: would actually be an improvement to customers by streamlining everything.
Speaker 1: But when asked about it, when when people said, well,
Speaker 1: does this mean that since there be no competition, you
Speaker 1: could lower the customer bill, they said no, not necessarily. So,
Speaker 1: in other words, customers would not see any benefit from this.
Speaker 1: The the benefits of competition are that companies will start
Speaker 1: to offer better prices and better options for customers in
Speaker 1: an effort to win more customers. But when you don't
Speaker 1: have competition, there's no reason to do that. In fact,
Speaker 1: you want to have higher prices because you can't go
Speaker 1: anywhere else for those services. That's the reason why monopolies
Speaker 1: are frowned upon and and normally either prevented or broken up. Although,
Speaker 1: as we talked about in our A T and T podcast,
Speaker 1: even the efforts to break up monopolies don't last forever.
Speaker 1: Often these companies will coalesce back together kind of like
Speaker 1: kind of like a planet getting broken up into space
Speaker 1: and then the gravity's crushes all the pieces back together,
Speaker 1: so you have a planet again. It's almost the same thing. Uh. Anyway,
Speaker 1: I don't want to get off on a total rant there,
Speaker 1: but if you listen to episodes about A T and
Speaker 1: T about net neutrality, those sort of discussions go into
Speaker 1: greater detail about this sort of stuff. Anyway. Uh, there
Speaker 1: are only a few markets that really allow you to
Speaker 1: have some choice in the United States, and that's a
Speaker 1: real problem. And people opposed to the Time Warner deal
Speaker 1: argued that if it went through, there'd be a true
Speaker 1: monopoly in cable service in the United States, it would
Speaker 1: belong to Comcast. Now, there were also numerous examples of
Speaker 1: regions that were passing laws restricting public broadband initiatives. In
Speaker 1: other words, lobbyists for the cable industry we're working with
Speaker 1: politicians to make difficult or even illegal for a government
Speaker 1: to offer broadband service as a utility. And there are
Speaker 1: certain areas in the United States where this was a
Speaker 1: big deal, specifically in places like Chattanooga. If Joe McCormick
Speaker 1: was in here, he's from Chattanooga, he could tell you
Speaker 1: about the crazy fast Internet service that people in Chattanooga
Speaker 1: can get through municipal WiFi, and cable companies really battle
Speaker 1: against that. They say it's unfair, which blows my mind,
Speaker 1: but that would be an entirely different episode for me
Speaker 1: to go into all of those details. At any rate,
Speaker 1: municipal broadband service became a battleground which continues to this day.
Speaker 1: The Federal Communications Commission has ruled that states are allowed
Speaker 1: to offer up broadband services, but cable interests are still
Speaker 1: fighting that decision and appealing it and arguing that the
Speaker 1: FCC doesn't really have the authority to make that statement.
Speaker 1: In the first place, just as they resist other competitors
Speaker 1: like Google Fiber entering their turf. So what cable companies
Speaker 1: have done is they've divided up the United States into
Speaker 1: into neighborhoods that they can effectively control because they're the
Speaker 1: only party in town, and then they do their best
Speaker 1: to keep everybody else out. And again, this makes perfect
Speaker 1: sense from a business perspective. You don't want competition to
Speaker 1: come in and shake things up. But for customers it's
Speaker 1: not such a great story. So it gets pretty ugly
Speaker 1: and a lot of people, especially on my side of this,
Speaker 1: have a lot of harsh things to say. And I
Speaker 1: will again try to avoid editorializing anymore than I already have.
Speaker 1: Uh And it's it's entirely possible that I have blinders
Speaker 1: on here. It's not like I think that the other
Speaker 1: companies are necessarily altruistic, but I always like to see
Speaker 1: more competition rather than less. Anyway, back to Time Warner.
Speaker 1: That's what started this whole digression of the first place,
Speaker 1: was the proposal for Comcast to acquire Time Warner. The
Speaker 1: deal would involve around forty five billion dollars in stock,
Speaker 1: and Congress began to scrutinize the deal, and a lot
Speaker 1: of advocacy groups were calling for the deal to just
Speaker 1: be outright rejected. Comcast agreed to divest itself of nearly
Speaker 1: four million subscribers, essentially handing them over to Charter Communications,
Speaker 1: and this was supposed to be a sign of good faith,
Speaker 1: saying Comcast had no plan on taking over the entire industry.
Speaker 1: Charter Communications would still be there and they had three
Speaker 1: point nine million more subscribers than they had before because
Speaker 1: Comcast was giving them up. So see, there's competition. There's
Speaker 1: still Charter Communications. It's not like by buying time Warder
Speaker 1: all cable would be Comcast for now, never mind the
Speaker 1: fact that once again there's not true competition in most markets. Anyway,
Speaker 1: while the deal was being considered, a T and T
Speaker 1: also announced its plans to acquire Direct TV for forty
Speaker 1: nine billion dollars, which added fuel to the fire of
Speaker 1: people worried about net neutrality and about media consolidation. There
Speaker 1: were tons of people now looking at these two major
Speaker 1: deals saying, we really need to think about this because
Speaker 1: if we go down this pathway, customers could be really
Speaker 1: hurt by the lack of choice. Further down, the road.
Speaker 1: In April two fifteen, Comcast and Time Warner announced that
Speaker 1: they were dropping the deal after numerous challenges and delays
Speaker 1: were brought up against it, and it was also rumored
Speaker 1: that the Department of Justice in the United States was
Speaker 1: leaning towards denying the deal in the first place, so
Speaker 1: walking away might have also been an attempt to make
Speaker 1: it seem as though the two companies had arrived at
Speaker 1: this decision themselves, rather than it being forced upon them
Speaker 1: by another party. The ongoing challenges for Comcast today include
Speaker 1: the FCC wanting to classified broad band as a title
Speaker 1: to utility, which Comcast and other cable companies are challenging.
Speaker 1: And also this is really troubling for cable companies, especially
Speaker 1: well specifically cable TV companies. There's a flagging interest in
Speaker 1: cable television. This is not a big surprise for most
Speaker 1: of my listeners. I'm sure, I bet there are a
Speaker 1: lot of you out there who are cable chord cutters.
Speaker 1: You know you've you've cut the chord for cable TV,
Speaker 1: and you get your entertainment through the Internet, but not
Speaker 1: through television. You might feed the Internet to your TV,
Speaker 1: but you're not getting it through cable TV. I'm sure
Speaker 1: there are a lot of you out there who are
Speaker 1: doing that right now, and I bet there's some of
Speaker 1: you out there who are fall into the category that
Speaker 1: is now being called cord never's. Cord never's are people
Speaker 1: who have never subscribed to cable television. So we're talking
Speaker 1: about young adults who have never taken it upon themselves
Speaker 1: to get cable TV. They're not interested. It's not how
Speaker 1: they consume entertainment. They get everything they want through the
Speaker 1: Internet or through over the air broadcast, but they've never
Speaker 1: seen the value of subscribing to a cable television service.
Speaker 1: We're seeing both of those populations grow over time. Now
Speaker 1: that means that cable television providers are experiencing a crunch.
Speaker 1: They're losing customers who are cutting the cord, and they're
Speaker 1: not gaining new customers fast enough because more and more
Speaker 1: people are choosing not to ever subscribe to cable TV
Speaker 1: in the first place. So you're getting a narrowing band
Speaker 1: of customers for cable television, which is really created an
Speaker 1: error of desperation in that industry. And it means that
Speaker 1: you're getting some some pretty hard moves in that that
Speaker 1: industry and it could ultimately mean that in the future,
Speaker 1: our television content will primarily come through the Internet, and
Speaker 1: cable TV as a thing will no longer exist. The
Speaker 1: industry it self will cease, and we'll have a totally
Speaker 1: different model for delivering television and creating television. That's a possibility.
Speaker 1: It's still going to take some time for that to happen.
Speaker 1: I mean, it's not like cable TV is in so
Speaker 1: much trouble that it could crumble at any second. It's
Speaker 1: still a huge, multibillion dollar industry. It's just a multibillion
Speaker 1: dollar industry that already is seeing loss of customers on
Speaker 1: either side of it, people leaving and new people not
Speaker 1: coming in. So it'll be really interesting to see where
Speaker 1: that goes over the next i'd say decade decade um.
Speaker 1: I think we're gonna see more and more people turn
Speaker 1: to the Internet. We're gonna see more services like Netflix, Hulu,
Speaker 1: Amazon offering up their own original content that you can
Speaker 1: only get through those services. I know that Disney is
Speaker 1: looking at the possibility of launching its own streaming service
Speaker 1: as well, So it may be that in the future,
Speaker 1: instead of subscribing to a cable company and then picking
Speaker 1: a package that gives you certain channels. You may have
Speaker 1: to pick between different streaming video services. In fact, you
Speaker 1: already do for certain things, like you might not be
Speaker 1: an Amazon Prime member, which means you don't get certain
Speaker 1: Amazon shows, or you might not be a Netflix subscriber,
Speaker 1: which means you don't get certain Netflix shows or Hulu.
Speaker 1: All of these have original content and in order to
Speaker 1: access it you have to subscribe to the to the
Speaker 1: services generally speaking, so maybe in the future we have
Speaker 1: more and more of those, which puts the burden still
Speaker 1: on the customer. You have to decide what you're willing
Speaker 1: to pay for and what you don't you feel is
Speaker 1: not worth the money. You just you just don't see it.
Speaker 1: But it's bad news for cable TV providers. Comcasts, however,
Speaker 1: of course, is in the position where it's not just
Speaker 1: a cable TV provider, it's a content provide fighter and
Speaker 1: its Internet broadband provider, so it has some other businesses
Speaker 1: that it wants to protect, and it may be that
Speaker 1: in the next few years we see Comcast doubled down
Speaker 1: on Internet content and broadband delivery, We'll probably also see
Speaker 1: Comcast continue to fight competition in those spaces, specifically, things
Speaker 1: like the entrance of Google Fiber into different regions. So
Speaker 1: that's what I think we're going to see in the future.
Speaker 1: For Comcast. It's gonna be more of a focus on
Speaker 1: broadband um and and Internet content, and we'll price see
Speaker 1: some pretty tough battles for municipal WiFi, for municipal broadband,
Speaker 1: for UH stuff like Google Fiber to be allowed to
Speaker 1: come into neighborhoods, and personally encouraged by the direction I've
Speaker 1: seen over the last year or two where it looks
Speaker 1: like the general consensus is that competition is a good thing.
Speaker 1: I don't even hate Comcast specifically. I I I have
Speaker 1: very strong opinions because of my own personal experience with
Speaker 1: this company. But that's my own personal experience and it's
Speaker 1: not a universal experience, and I would never suggest that
Speaker 1: my experience is the same that everyone else has had.
Speaker 1: But I love to see competition because it means that
Speaker 1: customers have choice, and I would much prefer to have
Speaker 1: choice than to be forced into using a specific provider
Speaker 1: because there is no other option, because that means that
Speaker 1: I can't weigh my options and make a decision. I
Speaker 1: have no deciding power. Um By creating that sort of competition.
Speaker 1: I can make those decisions, and maybe I stay with Comcast.
Speaker 1: Maybe I decided that's the best way for UH for
Speaker 1: me to get the access I need, or maybe I
Speaker 1: switched to a competitor like Google Fiber, which is rolling
Speaker 1: out service in Atlanta as I record this, UM and
Speaker 1: it will probably take another couple of years before that's complete.
Speaker 1: But the fact is that I think the more choice
Speaker 1: you have, the better better off you are as a consumer,
Speaker 1: up to a point. Obviously, if you have five hundred choices,
Speaker 1: then you have another problem ahead of you, which is,
Speaker 1: how do you decide among five hundred candidates, which one
Speaker 1: is the best. I hope you enjoyed that classic series
Speaker 1: on Comcast. As I said, I planned to do a
Speaker 1: part three, and who knows, it may already be out.
Speaker 1: In fact, maybe you listen to that one first, in
Speaker 1: which case, welcome back in time. And yeah, the cable
Speaker 1: industry has seen a lot of disruption over the last
Speaker 1: few years. We've seen a decline in cable subscriber numbers.
Speaker 1: UM not from you know, I s P service like
Speaker 1: actual cable SERVI this, but cable TV service certainly has
Speaker 1: seen a decline. So it'll be interesting to see how
Speaker 1: these companies all pivot. We've seen evidence of that with
Speaker 1: all the various acquisitions and mergers over the years. We're
Speaker 1: seeing it right now with Discovery, Warner Brothers, UM actually
Speaker 1: Warner Brothers Discovery. Sorry I've mishmashed the names there, but yeah,
Speaker 1: we're seeing cable networks, cable providers, all these companies try
Speaker 1: and adjust to a world that's moving away from the
Speaker 1: cable TV UH format. Anyway, I hope you enjoyed this.
Speaker 1: If you have suggestions for topics I should cover on
Speaker 1: future episodes of tech Stuff, please reach out and let
Speaker 1: me know. One way to do that is to download
Speaker 1: the I Heart radio app is free to download and use.
Speaker 1: You can navigate over to the tech Stuff part of
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Speaker 1: in future episodes. If you would prefer not to do that,
Speaker 1: you can always leave me a message on Twitter. The
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